Predictions are always risky but as politicians and NGOs prepare to descend on Glasgow for the COP26 summit later this year, it’s fairly safe to say that the need to encourage investment in the creation of a greener, cleaner economy is set to rise up the policy agenda.
Investment has been rising, of course. According to the 2021 annual Tech Nation report on the state of Britain’s innovation economy, equity funding for U.K. “impact” companies increased more than ninefold between 2014 and 2019. Across Europe as a whole, impact businesses working have raised about £11 billion in venture capital cash over the past two years.
So, all good, then? Investors are pursuing new opportunities as the world transitions to a net-zero, low pollution economy, and founders have a fighting chance of getting the support they need. But here’s a question. Are women being left on the sidelines as the green business revolution enters a new and more urgent phase.
Susannah McLintock is Investment Director at Sustainable Ventures – an investment fund established to support early-stage companies addressing climate change and resource scarcity issues. As she sees it, not only is the equity investment community as a whole dominated by men, cleantech, in particular, can be an unwelcoming space for women.
“Greentech is very STEM-oriented,” she says. “That can be a deterrent to women who don’t come from that background.”
Olivia Sibony – founder of green investment platform, SeedTribe – agrees. “Culturally, as investors, women tend to look for something meaningful,” she says. “But in many businesses, there is a lot of deeptech. So there are technical barriers.” Some of the hurdles are a product of the educational pathways taken by men and women, but there may also be a lack of female role models.
Breaking Down Barriers
But those barriers aren’t insurmountable. Later this month, London Climate Action Week is playing host to a series of events – collectively dubbed Diversity in Climate Innovation – aimed at encouraging women to work in the cleantech sector, either as entrepreneurs or investors.
Organised by Women in Cleantech, there are three sessions, in all. The first – focused on higher education and chaired by Pippa Gawley of investor, Zero Carbon Capital – will discuss strategies to help women start Greentech businesses and raise finance. Flipping over to the investment side of the coin, a second workshop – hosted by McLintock and Sibony – will provide expert advice to aspirant investors on how to assess pitches.
Three companies will be on hand to pitch, namely: Solveteq (co-founder by Dr. Ola Hekselman) which has devised a solution to recycle lead batteries in a sustainable way; The Shellworks ( co-founder Insiya Jafferjee ) which creates biodegradable plastic from fish waste; and nano materials venture, Oxnano.
And for those in search of inspiration, a showcase event will feature Greentech companies led by women. This event will feature Circulor (supply chain transparency and traceability); Bendi (sustainability in fashion); Mana Biosystems (agritech); and Qualis Flow (capturing data on waste).
The Balanced View
So why is this necessary? If Greentech companies are emerging and attracting funding – as the statistics suggest – does gender balance really matter. “It’s important for several reasons – not least social justice,” says McLintock. “From the business point of view, diversity is important. The evidence shows that diverse teams outperform no diverse teams.
And as things stand, there is a lot of work to do on the diversity front. “About one percent of VC cash goes to all-female teams. 92 percent goes to male-led teams,” says McLintock.
What’s more, when female teams do pitch to investors, they tend to be seen through a male lens. They might, for instance, be asked different questions and there’s anecdotal evidence aplenty to suggest these tend to edge women towards defensive positions about their businesses. Or the men in the room might simply fail to see the business opportunity. Thus, growth opportunities are missed.
A Place To Learn
Having more female investors should redress that imbalance while channeling additional cash into the sector. Financial trends suggest women will soon outstrip men in terms of the wealth they have at their disposal and that in turn should lead to more investment. However, McClintock and Sibony believe women need a suitable environment in which to learn the rules of the investment road.
“We need to find places where women feel comfortable to try out their investment and analysis skills,” says McClintick.
To address this issue – admittedly in a small scale way – the London Climate Action Week workshop on investment is bringing together women from different backgrounds to assess investment opportunities. A number of companies will pitch to participants. After the pitches, attendees will be split into breakout groups. Guided by experts, they will collectively assess the pitches.
Each will bring their own knowledge to the table and the forum will provide an opportunity not only to learn but also to build confidence, well away from a male-dominated environment. Having a mix of skills present is important. As Sibony points out, there will be women who are experts in specific technologies and others who bring the knowledge of running and scaling businesses or in-depth insights into markets.
The Diversity in Climate Innovation events won’t in themselves have a major impact on investor and founder diversity, but they are part of a bigger picture. The Mayor of London’s Women in Cleantech program is ongoing, encouraging more female investment and participation in a growing market. Sibony believes more can be done at the policy level in the form of incentives to invest in cleantech.
“We need more investors to come to the table,” she says. “We’ve started with women but it goes well beyond that.”